Factors Affecting Industrial Employment a Study of Ugandan Experience 1954 to 1964

INSTITUTE OF SOCIAL RESEARCH Occasional Paper i Factors Affecting Industrial Employment A Study of Ugandan Experience 1954 to 1964 AZARIASBARYARUHA Factors Affecting Industrial Employment A Study of Ugandan Experience 1954 to 1964 E. A. I. S. R. OCCASIONAL PAPER No. 1 Factors Affecting Industrial Employment A Study of Ugandan Experience 1954 to 1964 AZARIAS BARYARUHA Published for the East African Institute of Social Research, Makerere University College, Kampala, Uganda by Oxford University Press Nairobi, Kenya, 1967 Oxford University Press, Ely House, London W. 1 GLASGOW NEW YORK TORONTO MELBOURNE WELLINGTON CAPE TOWN SALISBURY 1BADAN NAIROBI LUSAKA ADDIS ABABA BOMBAY CALCUTTA MADRAS KARACHI LAHORE DACCA KUALA LUMPUR HONG KONG TOKYO © East African Institute of Social Research, 1967 Published by Oxford University Press and Printed by Kenya Litho Ltd. P.O. Box 775, Nairobi Contents Introduction i Acknowledgements vi Chapter One: Macro Analysis 3 Chapter Two: Case Studies 25 1.. Nyanza Textiles 25 2. Uganda Breweries 37 3. British American Tobacco Company 46 4. Kilembe Mines 55 5. Sikh Saw Mills 63 6. Madhvani Sugar 68 Chapter Three: Conclusions and Policy Implications 76 Acknowledgements I am indebted to a number of people who helped me carry out this study. Firstly, thanks go to the Management of six companies which in the first place agreed to give me data and to answer my questions, in particular Mr. E. B. Ogwal, Personal Assistant to the Managing Director, Nyanza Textile Industries Ltd.; Mr. E. Juko, Head Brewer, Uganda Breweries Ltd.; Mr. A. Luseno, Personnel Officer, B.A.T. (Uganda) Ltd.; Mr. W. F. de Haast, Mine Secretary, Kilembe Mines Ltd.; Mr. B. S. Gill, Managing Director, Sikh Saw Mills & Ginners Ltd.; and Mr.'R. M. Patel, General Manager, Madhvani Sugar Works Ltd., Kakira. Secondly, I wish to thank Directors Paul G. Clark and Walter T. Newlyn. Professor Clark interested me in the project and helped me in designing the first case study. Mr. Newlyn has been particularly helpful in commenting on and editing the final text. Finally, I am grateful to all the colleagues in the Economic Development Research Project, Sociology Research and Economics Department whose comments especially at our seminars, have been very constructive. Makerere University College AZARIAS BARYARUHA 1966. vi INTRODUCTION Two related issues are usually raised by economists with regard to the general problem of manpower in planning strategy. The'first is whether there will be enough trained personnel to implement the resol- utions of the plan. This has come to mean people of secondary education and above. The other one is whether the job opportunities, permitted by the economy's expansion, will increase fast enough to abs- orb those aspiring for wage employment. In a young economy, this has come to mean people mainly with primary education and many unskilled illiterates who seek to abandon the traditional life in favour of a modern one. It is the first issue that is receiving the greatest attention in many planning bureaus. In Uganda, for example, two years after independence, the number of aided secondary schools increased by 46$ and University enrollment and other high education levels increased rapidly. On the other hand, the number of aided primary schools increased by less than 0.1$ and employment for mostly unskilled people declined. Putting emphasis on the first issue is probably sound .economics since it can be regarded a misallo- cation of resources to try and produce people that could not be absorbed by the economy. However, in a country where people with primary education and above are in the minority, this indeed is a big problem. It means that in the short run, the largest section of the community will remain underprivileged. The question then is, will the privileged few be able to contain these underprivileged many? Planning as it applies to the young countries is a desperate attempt to grapple with almost insur- mountable problems. The chance of success these plans have may largely depend on the participation of the populace in the resulting increase in wealth, and starting with traditional society participation should mean a growing number of people each year in the modern sector. This study, which is restricted to Uganda, was prompted by the failure of employment to expand in Uganda in recent years. The main part of the study was that of carrying out case studies of some of the major firms in Uganda with the aim of examining factors affecting industrial employment. The investi- gations were designed to find out what employers have been doing with regard to their labour. For example, to what extent has capital been substituted for labour?, has labour productivity been raised by 2 careful selection methods, training etc.? to what extent have changes been due to rising wages or other factors? Chapter One is an attempt, on quantitative lines, to analyse the employment trends for the economy for the period 195^-1964. The exercise is not exhaustive because of incompleteness and some inacc- uracies in the data. Chapter Two contains, in respect of each case study, a factual report of the data obtained togeth- er with some analysis of the particular relation- ships between capital, output, employment and assoc- iated variables. The findings from the firms studi- ed tend to be diverse; this was probably to be expe- cted because of differences in background, experience, product-mix etc. Rather'than attempt to present the case studies in an integrated form, it appears reasonable therefore to present each case study in its entirety. It is probably in this manner that the contribution of the experience of each firm will, in its own right, stand out. Chapter Three is firstly an attempt to inter- pret the case studies. The aim is to compare them and relate the differing experience to the aggregate analysis in Chaptfer One. Secondly it aims at dis- cussing some of the policy problems involved in this field. For example, it will compare population growth trends with labour force growth trends. It will look into the problems of primary leavers as well as unskilled workers and the problem of immig- rant labour in Uganda and it will attempt to dis- cuss some of the economic and social effects. Finally, some possible ways of creating employment will be suggested. 3 CHAPTER ONE MACRO ANALYSIS The first point that must be made is that the total number of people employed in Uganda is a very small proportion of the population, Uganda is still primarily a peasant economy. Total recorded employment in 1964 was 224,894 out of a population of about 7.3 million. This figure does not include casual labour on 'shambas' or domestic servants, though this would not swell the figure very great- ly. Included in this total are 3163 Europeans and 9385 Asians, leaving 212,3^6 Africans, of which 57,724 were non Ugandans. (i) The Structure of Employment Before starting to analyse the changes which have taken place over the period, it will be useful to delineate the structure of employment. For this purpose it is necessary to confine our attention to African employees, in most of the classifications, because of statistical limitations. For the first classification however, that between the private and public sectors (Table i), the figures cover all employees. TABLE I TOTAL EMPLOYMENT BY SECTOR 1964 PRIVATE PUBLIC INDUSTRY SERVICES TOTAL Numbers $ Numbers % Number % African 120,718 92 91 ,628 97 212,346 94 Asian 7,960 6 1 ,425 2 9,385 4 European 2,052 2 1,111 1 3,163 2 Source: Statistical Abstract The largest employing industrial sectors in 1964 were Agriculture, Local Government and Constr- uction in that order. The latter two sectors had an even larger share of total African employment ten years earlier; the share of construction fall- ing from 20.2 per cent of total employment in 195^ to 11.3 per cent in 1964. The distribution of African employees by industrial sector is given in Table II I 5 On a regional basis (Table III) employment structure has changed slightly. Buganda employed 45$ of the work force in 1964 compared to 43$ in 1956. In absolute numbers, employment declined by only 3$. in Buganda between 1956 and 1964. Declines of 14$ and 17$ occurred in Eastern and Northern regions respectively. Only Western region had an increase in employment (4$) between 1956 and 1964 thus increasing its share from 20$ to 23$. TABLE III AFRICAN EMPLOYEES BY REGION 1964 REGION NUMBER $ Buganda 94,636 45 Eastern 49,3^7 23 Western 48,442 23 Northern 19,921 9 Source: Enumeration of Employees (ii) Employment, Output and Productivity We turn now to the gloomy picture of the change in numbers employed since 1954. Between 1954 and 1964, the total recorded employment figure fell from 259,220 to 224,894, a decline of 13.2 per cent or an average annual rate of decrease of 1.4 per cent. African employment during the same period fell by 5.5 per cent or at an annual rate of decrease of 0.6 per cent. - Even more depressing' is the fact that African employment fell by 7.2 per cent between 1962 and 1964, a period during which Gross Domestic Product (G.D.P.) increased by 33 per cent. The relationship between total employment and G.D.P. during the period is shown in Table IV in which G.D.P. is shown at current prices and at 1960 prices, the latter figure being shown in bra- ckets . 6 Clearly it is better to look at the relationship between employment and product in real terms but in part of the sector analysis and some of the case studies the calculations have to be in terms of current prices.

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